Development of court practice regarding application of the beneficial owner concept

On 2 August 2017 the Commercial Court of Kaliningrad Region delivered its decision (the “Decision”) on NPO Digital Television Systems (the “Company”) (case No. А21-2521/2017). The Decision is currently about the only positive example of the most recent court practice of the Russian courts dealing with application of the concept of the “person beneficially entitled to income” (the beneficial owner concept). Continue reading “Development of court practice regarding application of the beneficial owner concept”

Development of court practice on tax disputes over charging personal income tax on amounts paid to employees by agreement at termination of employment

On 16 June 2017 the RF Supreme Court rendered a ruling in case No. А42-7562/2015. In this case the court considered a dispute between Murmansk Trawl Fleet PJSC (hereinafter MTF) and the Federal Tax Service Interdistrict Inspectorate for Major Taxpayers in Murmansk Region. One of the subjects of the case was the charging of personal income tax on amounts paid to an employee by agreement between the employee and the employer at termination. Continue reading “Development of court practice on tax disputes over charging personal income tax on amounts paid to employees by agreement at termination of employment”

Russia’s accession to the Multilateral Convention to implement measures under the BEPS Plan

On 7 June 2017 the Russian Federation signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the “Multilateral Convention[1]). The Multilateral Convention was developed by the countries that are members of an Ad Hoc Group of the Organisation for Economic Cooperation and Development as part of implementing “Action 15” under the Plan to Prevent Base Erosion and Profit Shifting (BEPS). The Multilateral Convention makes it possible to implement the provisions of the BEPS Plan without amending existing agreements on avoidance of double taxation (“Tax Agreement”). Each jurisdiction may choose the provisions it considers acceptable for itself (other than mandatory provisions) and notify their treaty parties of this. Continue reading “Russia’s accession to the Multilateral Convention to implement measures under the BEPS Plan”

Development of court practice on tax accounting of inventory shortages

On 19 May 2017 the Arbitration Court of the Moscow Region rendered a decision in case No. А41-69837/2016 under the claim of KVINTMADI Closed Joint Stock Company (the “Company”). Continue reading “Development of court practice on tax accounting of inventory shortages”

Transfer pricing compliance in Russia. Part 3. Stages of transfer pricing compliance

Dentons’ Tax and Customs practice congratulates its clients and friends on the end of the first stage of transfer pricing compliance for 2016 – the filing of the notification of controlled transactions completed in 2016! Continue reading “Transfer pricing compliance in Russia. Part 3. Stages of transfer pricing compliance”

Development of court practice of determining the starting date for payment of property tax on a fixed asset that is ready for operation

On 28 April 2017 the Commercial Court of St. Petersburg and Leningrad Region rendered a decision in case No. А56-87465/2016 (the “Decision”) under the claim of Penobeton-Pikalevo LLC (the “Company”). The case considered the issue of declaring a fixed asset ready for operation for the purpose of starting to pay property tax. Continue reading “Development of court practice of determining the starting date for payment of property tax on a fixed asset that is ready for operation”

Development of court practice of determining direct capital investment for the purpose of applying the 5% withholding tax rate when paying dividends to a Cypriot company

On 3 May 2017 the Commercial Court of Chelyabinsk Region rendered a decision in case No. А76-20508/2016 under the claim of Chelyabenergosbyt PJSC (the “Company”). Continue reading “Development of court practice of determining direct capital investment for the purpose of applying the 5% withholding tax rate when paying dividends to a Cypriot company”